Recent findings have shown that vision is altered when you place your hands near the object you are looking at (Abrams, Davoli, Du, Knapp, & Paull, 2008; Davoli & Abrams, 2009). It is, however, not known at what stage of visual processing the presence of hands in the visual field begin to have an effect on perceptual and attentional functioning. To determine the underlying neural processes of this effect, the present study examined electrophysiological measures of brain activity. We measured visual evoked potentials (VEPs) while participants either had their hands in their visual field (hands up condition) or lowered (hands down condition). Participants indicated whether a cross at fixation changed colour while passively viewing a black and white checkerboard reversal pattern (1.5 Hz). Time locked VEPs to checkerboard reversals revealed that when the hands were near the display, an attenuation of the attention-related P2 component was observed for centrally presented stimuli but not for peripherally presented stimuli. These results provide support for the view that spatial processing is enhanced for hand-near objects.